Ican 2024 Corporate Strategic Management And Ethics Question 1

Bascon Foods Plc is a producer of fast-moving consumer goods in Nigeria. Since it commenced business in 1960, the company has been providing Nigerians with high quality food products, such as cereals, cocoa beverages, confectionaries, and soaps, all at competitive prices. The following product brands had consistently commanded 10% of the market share in their respective segments: Bascon Cornflakes, Bascovite chocolate beverage, Rave cream soap, and Bascon digestive biscuits; all of which have grown to become household names among Nigerian consumers. In 2021, the company launched Rave Ice-cream. This was done as part of its growth strategy through diversification and in response to the growing demand for ice-cream. Unfortunately, one year after the launch of Rave Ice-cream, sales have been very low with Bascon Foods Plc., thereby, struggling to break-even on this product line. The ice-cream market is said to be growing at the rate of 5%, but the market share of Rave ice-cream has been less than 0.5%. In addition, Bascon Cornflakes, the company’s flagship product experienced a sharp decline in total annual sales by 5% per annum between 2019 and 2021. Investigations show that this is partially attributable to the intense competition in the market, which resulted from the entry of a major global brand; Nekloggs to the Nigerian market. The market share of Bascon Cornflakes currently stands at 2% in a market that is growing at 16%. On the other hand, annual sales growth of Bascovite chocolate beverage has consistently risen by 6% per annum between 2016 and 2021. The market for chocolate beverages is believed to be growing at the rate of 8% per annum. Also, the market shares of Rave cream soap and Bascon digestive biscuits have been fairly stable in the last 7 years at 5%. Market growth rate for cream soap and digestive biscuit market is 7%. Profits made from Bascovite Chocolate beverage, Bascon digestive biscuits, and Rave cream soap have been high and stable. Despite the challenges faced by the company in each business unit, all product brands enjoy dominant positions in their respective markets, except Rave Ice-cream, whose market share is currently negligible. Also, all of the company’s products are in fast growing markets. As a strategy to reduce costs and thus, increase profits across all its product lines, the Board of Directors of Bascon Foods Plc is also planning to outsource a number of its non-core activities. It is hoped that within a short period of time, after the proposed outsourcing strategy has been implemented, Bascon will become a low-cost producer of household food items.